Two of Spring’s big differentiators are our objectivity and our transparency. With no ties to carriers or captive insurance managers, we can provide unbiased recommendations that are truly best for the client. In addition, we believe in being flexible and developing solutions that meet the unique needs of the clients. This leaner approach resonates with clients as we are able to be nimble, move quickly and offer tailored solutions for each challenge.

We are not afraid to think outside of the box and this has helped us to constantly innovate and push the industry forward to develop new solutions. We know our niche areas of expertise and do not try to do it all, but clients come to us for a range of reasons—actuarial analyses, captive consulting, absence management, etc.

“We are not afraid to think outside of the box and this has helped us to constantly innovate and push the industry forward.”

Another aspect that has made us unique in this space has been our ability to bring together P&C and employee benefits actuarial teams. Other players in the market work in silos, limiting their ability to see the larger picture. One example of this has been the success we have seen with our refeasibility studies, where we pull together a holistic overview of enterprise risk but also comment on and validate the benefits of bringing together non-correlated risks (such as workers’ compensation and long-term disability).

We have been in the industry for decades and are true pioneers in the captive insurance sphere. A testament to our success are the accolades we receive from our peers, clients and colleagues. We are humbled by them and continue to strive to do better.

Although progress has been made in recent years, a lack of diversity still prevails in the insurance world. I would love to see more women and people of colour taking on leadership roles. Also, we’ve seen the clock run out on the industry’s traditional ways of thinking.

As we discuss topics such as cyber risk, blockchain, insurtech, increased teleworking, telehealth, the gig economy and the like, professionals in this field will need to open their minds and get on board with new trends and ways of conducting business.

At Spring we welcome regulatory changes in the positive direction and always try to take a proactive view on them. Sometimes this means taking a conservative approach on behalf of our clients, where we believe there may be exposure in the future. In other cases, it means explaining the implications of decisions to clients and constantly educating them on the changes—the present ones as well as those anticipated for the future.

We work closely with legal experts and prioritise staying abreast of legislative news. Our clients get regular legal alerts and newsletter updates, and we have a full compliance and legal team at Alera Group that works hard to host educational webinars and offer consistent guidance. We understand the intricacies of the Department of Labor’s filing processes when it comes to captives. This has led us to become the go-to experts in the industry on employee benefits in a captive.

We have not worked with many 831(b) captives, but the court cases surrounding them have caused us to develop a checklist for clients to create a clear roadmap for best practices and avoid potential pitfalls in the future. This checklist has become a useful compliance tool that we and our clients leverage.

Like all businesses, Spring was thrown for a bit of a loop at the onset of COVID-19. Luckily, with several remote workers prior and a relatively tech-savvy team, it didn’t take us long to ensure we were all able to work effectively from home. We are lucky to have this safe option, as many do not.

While we miss seeing each other, some Spring team members would tell you they feel more connected now than they were before. We still have Happy Hours, they just look a little different.

From a business perspective, we had to pivot our focus and, more importantly, show compassion regarding what employers and employees are going through. First and foremost, we aimed to show support for our clients who were up against undue hardship—those in healthcare, hospitality, etc, who were significantly impacted. Once the urgency settled a bit, we noticed employers prioritising different things, such as understanding their liability and their workers’ compensation and business interruption coverage.

We saw an uptick in captive insurance interest to combat the expected hike in premiums. Enterprise risk management became buzzworthy. Further, we saw many employees struggling to keep up with the various leave policies at the federal, state and regional levels.

Steven Keshner led Spring’s actuarial team in a few studies regarding paid family leave (PFL)—a new and quickly evolving employee benefit. Although PFL experience is limited, the team gathered data from all available sources to create a sophisticated actuarial cost impact model. As different states have very different laws and requirements, the model used regression and simulation to make reasonable adjustments.

We considered the impact from underlying statutory disability plans as well as behavioural changes over time as PFL becomes more popular. These studies provided important insight for stakeholders such as employers and carriers to understand and manage their PFL risk and its impact on current disability pricing.

Steven guides Spring’s expert benefit and P&C actuarial team to perform many captive pricing and feasibility studies, covering employee benefits and P&C coverages. Our actuaries worked together on a pricing project for a Fortune 500 company which involved collecting the client’s historical loss and exposure data specific to each line and developing a pricing model that considered both this historical experience and the correlations of risk between lines.

Where risk is independent, pricing margins were reduced. This study also included the creation of a simulation model that used these correlations to more accurately project expected losses and the volatility in projected annual experience.

Finally, the results of the simulation model output were used to determine appropriate pricing risk margin and capital levels for the captive. Our analysis resulted in reduced premiums across the various lines.

The most common indication that a captive would not be feasible is inadequately passing insurance tests, specifically risk distribution. There are various ways risk distribution can be accomplished but for smaller insureds and/or where insured exposures are not significant it may not be feasible to form a captive for themselves. This is where we are able to leverage our best practice toolkits and ensure our clients have a good understanding of the factors they should consider to establish a compliant captive insurance programme.

Another common issue that comes up with our feasibility studies is when insurance cost savings are close to zero or even negative for a given line being insured by the captive, when comparing the cost of the current funding programme.

Competitive commercial markets often drive these conditions, but generally speaking, over the long term a captive solution will reduce total insurance spend even through these soft market cycles.